Employer of Record in Netherlands

How Employer of Record (EOR) hiring works in the Netherlands

An EOR allows a foreign business to hire employees in the Netherlands without establishing a Dutch entity. The EOR becomes the legal employer and manages the employment relationship. They handle payroll, tax withholding, statutory benefits and compliance with Dutch employment laws. Foreign employers manage the employee's day-to-day activities and performance. Rivermate offers compliant hiring through:

• In-country experts familiar with Dutch employment laws and the labor market.
• Network partners who allow us to offer competitive mandatory and market-related benefits.
• The Rivermate platform that allows us to manage all aspects of the employment relationship.

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Dutch labor market: At a glance

The hiring market
Greatest hiring activity:	Amsterdam
Hiring timelines:	Local employees: 1-3 weeks Foreign nationals: 30-90 days, depending on the visa route.
In-demand sectors:	ICT, healthcare, engineering, education, construction, logistics, business services, consulting
Sectors with skills shortages:	Healthcare, ICT, technology, education
The salary market
Employer tax contributions:	Range: 15% - 30% of base salary Aof - Disability Insurance AWf - Unemployment Insurance Zvw - Healthcare Insurance Act Whk - Return to work fund Wko - Childcare Premium
Minimum wage:	Hourly: €14.99
Average gross annual salary for the Netherlands:	€40,790 (excluding holiday allowance and bonuses)
Income tax brackets:	Box 1: Up to €38,883: 35.70% Box 2: From €38,883 to €78,426: 37.56% Box 3: Above €78,426: 49.50%

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Total cost of employment in the Netherlands

Total employment costs in the Netherlands vary depending on the job, location, industry and mandatory contributions due by the employer. Costs can include a base salary, employer contributions and taxes and additional allowances paid by the employer.

Salary

Gross annual salaries vary by industry in the Netherlands. The CBS (Centraal Bureau voor de Statistiek) provides a useful benchmark for employers. Below we compare some of the key industries for the country:

Industry	Monthly salary including overtime (Euro)
Information and communication	4,924
Financial services	5,792
Business services	3,337
Education	3,629
Specialized business services	4,650
Industry and energy	4,350

Average personal income, as reported by the CBS, shows that workers in Amsterdam earn the highest salaries in the Netherlands, at €46,500.

Employer contributions and taxes

According to local employment laws, employers in the Netherlands pay the following mandatory social security contributions:

Contribution	Rate
Aof - Disability Insurance	6.27% to 7.63%
AWf - Unemployment Insurance	2.74% to 7.74%
Zvw - Healthcare Insurance Act	6.10%, maximum contribution income of €79,409
Whk - Return to work fund	0.11% to 3.36%
Wko - Childcare Premium	0.5%

1. The AWf contribution depends on whether the employee is on an indefinite-term contract (2.74%) or a fixed-term or temporary contract (7.74%).
2. Small employers pay the lower Aof contribution, while large employers pay the higher contribution.

In the Netherlands, employers must pay employees an 8% holiday entitlement (vakantiegeld). By default, the employer holds it and pays it out in May or June (right before the summer holidays). This is the most common practice in the Netherlands, but some companies elect to pay the allowance monthly. This must be clearly stated in the employment contract and agreed with the employee. Where collective labor agreements are in place, they regulate when this allowance should be paid.

Pension contributions

Pension contributions in the Netherlands depend on which part of the three-pillar retirement system you are funding.

• Pillar 1 - State pension (AOW): Entirely funded by the employee through payroll deductions.
• Pillar 2 - Workplace pensions: Shared by the employer and employee and vary depending on sector collective agreements.
• Pillar 3 - Private pension: Voluntary employee contribution with certain tax-deductible limits.

Mandatory benefits

Dutch employees are entitled to certain mandatory benefits such as annual leave, sick leave, maternity leave, paternity leave, paternal leave and emergency leave.

One nuance of the Dutch employment system is that employers must continue to pay up to 70% of the employee’s salary for two years during an illness. However, certain sector-wide collective agreements may require a payment of up to 100% in the first year of illness. The employee may not be dismissed during this time.

Under Dutch privacy laws, an employee does not need to tell an employer what illness they have, their symptoms or the cause. The employee only has to report that they are sick and estimate how long they will be away.

The bottom line: Employers can expect to pay 15-30% on top of gross salary.

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Employer cost calculator

Calculate total employment costs before you make a formal offer with Rivermate’s employer cost calculator.

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Case Study: Rivermate helps a tech company hire compliantly in Amsterdam

A German SaaS company urgently needed to bring a remote employee working in Amsterdam into a legally sound employment arrangement under Dutch law. The situation became a layered problem of legal questions, tax obligations and contractual gaps that had accumulated without resolution. The situation came to a head when the employee needed an employer’s declaration to support a housing application in Amsterdam.

The company turned to Rivermate, which established a compliant Dutch employment arrangement, resolved the contractual gaps and provided the employer declaration the employee needed under a tight deadline.

Read the full customer story

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What to expect when hiring in the Netherlands

Market condition	Current reality
Talent availability	🔴 Tight
Specialist talent	🔴 Highly competitive
Salary pressure	🟡 Moderate to high
Candidate expectations	🔴 High

The Netherlands also has a unique labor market that emphasizes work-life balance and worker protections. When you hire a Dutch employee, the major challenges will be compliance with Dutch labor laws and rising employment costs driven by demand for key talent.

For local employees, onboarding can be completed within 1-3 weeks depending on whether all required documentation has been received. Obtaining a BSN (citizen service number) takes the longest during onboarding, but without this number, an employer cannot legally complete the wage tax declaration.

The immigration process in the Netherlands is not difficult, but the IND (Dutch immigration and Naturalisation Service) faces ongoing backlogs due to the volume of applications. The process can take 30 to 90 days, and delays usually result from requests for additional documents or questions the IND has about the application.

For an international employer considering hiring in the Netherlands, the main advantages are the highly skilled talent pool, high English proficiency and a business-friendly environment. In sectors such as ICT, healthcare, education, engineering and technology, where talent is scarce, the market is very competitive. In these sectors, market-related salaries are often not sufficient to attract top talent.

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What employers must know about terminations in the Netherlands

In the Netherlands, employees are strongly protected against unfair dismissals, making it important to follow the right termination procedures.

You must have a valid reason for a termination, for example, refusal to perform work, culpable conduct, reorganization or company closure. The process and monetary settlement depend on whether the employee agrees to a termination (mutual agreement), consents to it, or does not agree with the dismissal.

Starting point	Definition
Dismissal by mutual consent	You and the employee agree to terminate employment by mutual consent. The terms of the dismissal are written in a termination agreement (including a final settlement).
Termination with employee’s consent	The employer decides to end employment, and the employee consents. A transition payment is required.
Employee does not consent to termination	The employer needs approval from the Employee Insurance Agency (UWV) or the sub-district court. A dismissal without approval is not legally valid.

An EOR, like Rivermate, can help you manage the compliance risks associated with terminations. As the legal employer, the EOR handles the termination procedures and financial calculations associated with the dismissal. This protects both you and your employee from procedural errors that can lead to unfair dismissal claims.

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How Rivermate can help you stay compliant when hiring in the Netherlands.

Our local experts understand how to apply local labor laws to every aspect of the employment relationship and will handle it for you. This lets you focus on your business and finding the talent you need.

Learn more about Employer of Record services

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Key compliance issues that affect hiring in the Netherlands

Global companies are expected to adhere to all the rules and regulations that govern the employment relationship in the Netherlands, but when you first look at hiring an employee, focus on:

Compliant employment contracts

Employment contracts must comply with Dutch employment law. Foreign employers cannot use their home country’s employment agreement to hire in the Netherlands. The two main types of contracts used are indefinite-term contracts and fixed-term contracts (or definite contracts). Dutch law limits fixed-term contracts to three within a 36-month period.

Probation periods can be included in these contracts, but they are capped at a maximum of two months. For short-term contracts (6 months or less), there is no probation period. Collective labor agreements (CAO) may apply to certain industries. In this case, the stipulations of the CAO take precedence over individual contract terms.

Worker misclassification

Foreign companies sometimes use independent contractors such as freelancers and self-employed individuals for project-based work. Hiring contractors can be a flexible way to bring in specialized skills, but employers must manage the relationship carefully to prevent worker misclassification. This is when a worker is called a contractor but operates like a permanent employee.

An EOR provider in the Netherlands can help you manage these risks by ensuring that new hires are correctly classified in accordance with strict authority and financial independence rules.

Meeting the minimum wage requirement for a highly skilled migrant visa

In the Netherlands, employers must establish the salary requirement for a highly skilled migrant visa before making an offer because it affects an immigration application. Employees who do not earn the minimum wage cannot apply to work in the Netherlands. The minimum gross monthly salary thresholds are as follows:

• Over 30 years old: €5,942
• Under 30 years old: €4,357
• Reduced salary for recent graduates or researchers: €3,122

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Benefits of using an Employer of Record in the Netherlands

By now, you understand that the Dutch labor market is strictly regulated and that employers need to understand their obligations well to avoid compliance mistakes. If you don’t want to establish a local entity and manage compliance yourself, then partnering with an EOR company, like Rivermatete, could be the answer to your hiring needs. Consider these benefits for yourself:

• Advice on market-related salaries and benefits to help you attract top talent.
• Compliant employment contracts for all your employees.
• Payroll, taxes, mandatory contributions and additional allowances calculated and paid to the employee on your behalf.
• Ongoing management of HR and compliance issues for the duration of the employment contract.
• Support with challenging compliance processes such as visa applications and terminations.
• 24/7 dedicated support from real people, not bots.

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Ready to hire in the Netherlands?

Rivermate makes global employment easier for foreign businesses. If you’ve found the talent you want in the Netherlands, talk to a Dutch Hiring Expert about your hiring needs.

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Sources:

https://www.uwv.nl/nl/arbeidsmarktinformatie/trends-ontwikkelingen/blijvende-tekorten-maatschappelijke-uitdagingen?
Minimum wage amounts | Government.nl
Netherlands - Individual - Taxes on personal income
https://www.cbs.nl/nl-nl/cijfers/detail/81431ned?q=keyword%3Alonen&utm
Table 9: Employed persons' insurance contributions 2026 | Tax Administration